VIENNA - A UN nuclear watchdog report due this week is expected to reveal a slowdown in the growth of Iran's stockpile of higher-grade enriched uranium as it is using some of the material to make reactor fuel, diplomats said on Wednesday.

If confirmed in the quarterly report, the development could be significant as it could help buy time for big power diplomacy to try and find a negotiated settlement to a decade-old dispute that has stirred fears of a new Middle East war.

Six world powers and Iran are due to meet for the first time in eight months next week to try again to break the stalemate, but analysts expect no major progress toward defusing suspicions of an Iranian quest for nuclear weapons capability anytime soon.

Israel, which has warned it might bomb Iran's nuclear sites as a last resort, last year gave a rough deadline of mid-2013 as the date by which Tehran could have enough higher-grade uranium to produce a single atomic bomb.

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